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Finance information for non-finance staff

finance information for non finance staffOne of the great challenges for all Finance members is explaining financial results to non-finance staff.

Often a well-drawn graphic or chart allows the communication of fair amount of detail without overwhelming the audience or forcing them to understand finance.

The tough part is coming up with the graphic.

If you have an examples that you have seen on-line (financial results, display of data, etc.) that could serve as good ideas for presenting detailed information. Please share the URL or post under Resources.

I will start with a couple items that have helped me:

1)
http://www.edwardtufte.com/

Edward Tufte has made a career of how to present information. I saw him speak a few years ago and it was excellent insight.

2)
http://www.sap.com/solutions/s...dashboarding/index.epx

I don't work for SAP, but I've used Xcelsius at three companies - it is a tool that overlays a flash file on Excel. In short, it also for an interactive display of data. You can change variables (e.g. sales growth) in the middle of a powerpoint presentation and the financials are automatically updated.

This was a great way to show how operating variables (growth, spend rate, etc.) influenced the budget or forecast.

3) Presentation books I've used for ideas:

Presentation Zen - by Garr Reynolds
slide:ology: The Art and Science of Creating Great Presentations - Nancy Duarte

Answers

Jane Levin
Title: Corporate Controller
Company: Private
(Corporate Controller, Private) |

I use excel for working on and presenting information to my company (which I am asked to do monthly - we have a very open company culture). I find it's not the tools you use, but your attitude to presenting information. Some people are graphical and other (most, I think) are not. This is especially true in the accounting and financial disciplines. This results in lots of charts and an abundance of numbers in ranks and files.

However, most viewers, as you note, can more easily comprehend data when presented in a visually compelling way. Or forget "compelling" and just focus on presented graphically instead of in rows of numbers. We get so used to reading numbers that we forget most others don't have the same affinity or capability for doing so.

It has taken me many, many years and a CFO who was very visual to overcome this love of putting numbers, numbers everywhere. Excel has very powerful graphic capability which is easy to use, I just had to get used to using it. Now I look at every chart and first ask myself what it is there to convey, and then I ask whether it could be done and done better with a graph of some sort. I usually decide that it can and my recipients are more engaged and comprehending as a result.

Jay Shah
Title: Treasury Manager
Company: J.M. Huber Corporation
(Treasury Manager, J.M. Huber Corporation) |

I have a question for you. How you add data to existing Excel charts from different work sheet in same work book. I tried but no success. Any help will be appreciated.. Thanks,
Jay

Michael Schwindle
Title: CFO / VP Finance
Company: Musician's Friend
(CFO / VP Finance, Musician's Friend) |

I have found the easiest way is to:
1. Create the initial chart with the first piece of data.
2. Go to the second piece of data on another chart. Highlight the data to chart and Copy it.
3. Go back to the chart and paste it. Generally, it is better to do a paste-special as this will allow you to be more specific around whether you want to append the data to the existing series (line, bars, etc.) or as a new series.
4. Repeat as many times as necessary.

After you have done this, select one of the data series and look at the formula bar - there you will see how Excel is really seeing it. The rest of the "experience" is about making it easy for you to create that formula in the formula bar.

Tony Garay
Title: Director of Finance
Company: in-between
(Director of Finance, in-between) |

I've had the good fortune of partnering with many (non-finance) functional executives as well as teaching Management Accounting in EMBA program and these experiences have taught me that key success factors to this are:
1) Explaining concept - keep it as brief and simple as possible since if you make this too long and/or complicated you will lose your audience immediately.
2) Move from concept to relevant (specific to company/audience) examples - preferably with what/if scenarios.
3)If possible, expand to include examples on compensation impact (using hypothetical individuals) and/or business impacts using past real examples elsewhere.

Finance is generally not something non-finance managers enjoy too much so give them a reason to be interested and make it as non-complex as possible (i.e. put away that 200 line Excel worksheet).

Nate Cammack
Title: CFO
Company:
(CFO, ) |

Kudos to Mark. Read Tufte's book (the first one). It's quite extraordinary. As to what to present, and how - your audience each represents pieces of a P & L (same for relevant portions of balance sheet) This will probably be how the CEO manages the financial results - but it's important to reach an understanding with the CEO on presentation of financial information - not with regard to "facts", but how to frame the information to support the dialog that should accompany the information. A manufacturing guy focuses on Cost of Sales/Margins; a Sales guy looks at revenue; each functional manager has his or her piece of OpEx. Typically one month's data is too isolated, so you naturally wind up showing trend data over time vs. plan and/or forecast.
If you wonder about this, you can and should sit with the audience members one-on-one to be sure you understand what they focus on and how best to present that data. Exec staff presentation need to be homogeneous in terms of graphics etc, but you'll find that totals, trends, and exceptions are what will command their attention. On exceptions, never announce variances cold - always meet with your functional counterparts prior to group meetings - they get up to speed courtesy of your being proactive - and they appreciate it.
That said, you're the CFO, and there are standards by which you operate - other managers know this and expect it. Ultimately you have to serve your team members and conform to the standards of your profession. i.e., your job is to lead in this.

Philip May
Title: VP, Finance and Corporate Development
Company: England Logistics
(VP, Finance and Corporate Development, England Logistics) |

Here are a couple more links to resources. The first is more in the camp of Tufte. Go to Perceptual Edge for reviews of visualization software, commentary on good practice and poor practice. http://www.perceptualedge.com/

The second link is more practical/tactical in nature. There are many practical pre-made excel dashboards into which you can map your data. The site also includes many resources of interest to this audience and this topic. http://www.exceluser.com/dash/index.htm

I have found that when I try to create the elegant charts such as Tufte proposes (High data to ink ratio) it is under appreciated and not understood by the intended audience (ops manager, P&L owner.) Simple trend charts of the data compared to budget, forecast, prior year are the utility knife for quickly communicating data.

One of my personal favorites is the waterfall chart. These are tricky to build and manual to maintain. If someone has directions (or link) for creating/maintaining, I would appreciate it.

Michael Schwindle
Title: CFO / VP Finance
Company: Musician's Friend
(CFO / VP Finance, Musician's Friend) |

I likewise prefer annotated waterfall charts to concisely convey maximum information in a minimum format. It clearly shows "good guys" and "bad guys" and provides a great overview. Creating these, however, can be a major pain. At its simplest, the waterfall is simply a stack-bar chart with one of the bars formatted to no lines and no color.

Two tools I have used:
1. Good old fashioned Excel: A couple of years ago, I wrote a spreadsheet that would correctly calculate the stackbars. Unfortunately, this will not correctly adjust the color schema or the annotations on the chart. That, as far as I know, must be done manually and needs to be checked every iteration.
2. Think-Cell: This is a great add-in for Excel and Powerpoint. Among its other fine attributes such as Marimekko charts is a waterfall charting option. If you have ever looked at McKinsey powerpoint charts and wondered how they generated them, this is the tool of choice.

Topic Expert
Sunil Thukral
Title: Controller/Technical Accounting Advisory..
Company: Consultant
(Controller/Technical Accounting Advisory/ SEC Reporting, Consultant) |

Michael, I completely agree with you - I have always found that the waterfall charts are the best to visually convey the positive and the negative variances between any two time periods.

Charley Kyd
Title: Founder
Company: ExcelUser
(Founder, ExcelUser) |

Excel offers at least four significant advantages for communicating *any* quantitative results, including financial results.

1. Excel can generate professional-looking charts and tables easily.

2. It's often useful to combine internal data from one or more sources with external data, including benchmarks, economic data, weather data, stock data, and so on. Excel is one of the few programs that can allow knowledge workers to present such disparate data easily. (This data can help to explain not only what happened, but also answer two important questions: "So what?" and "Why?".)

3. The incremental cost of using Excel for this type of work is roughly zero. The company already owns Excel and many employees know it well. Even if Excel users need minor training to bump up their charting skills, the cost typically is far less than the cost to train them to use newly purchased software.

4. Excel displays typically are created by knowledge workers, who understand the meaning of their data, not by the IT staff, who don't. Therefore, the knowledge workers are better qualified to display the data clearly, and to offer the written and verbal explanations that many managers need.

Finally, one occasional criticism of Excel is that it lacks the fancy chart types that graphical software like Xcelsius offers.

In fact, I've found the absence of obscure chart types to be an advantage for Excel. People understand simple chart types like line, column, bar, and area plots. So managers don't need to study those charts to understand what the charts are trying to communicate.

Therefore, those simple chart types typically communicate their data quickly. Gaining such quick understanding gives managers more time and energy to divine the business implications of the data shown.

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